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The Digital Skeptic: Even Beyonce Battles the Bottom Line on Tour

Written by: Jonathan Blum07/18/13 - 8:00 AM EDT

NEW YORK (TheStreet) -- Gary Bongiovanni has spent three decades telling people just how hard it is to make a living on the road.

"Touring used to be the bastard stepchild of the music business. You toured to sell records," said Bongiovanni, founder and editor of the Fresno Calif.-based live event tracking firm Pollstar. "But now musicians tour to get paid and a lot of people think it's easy money. But it's a really, really risky business."

Investors who are tiring of blithely accepting the Internet Age drivel that live-event dollars somehow make up for thin digital revenues at entertainment giants such as Warner Music Group, Universal Music Group or Sony Music Entertainment, are wise to listen to Bongiovanni. He -- with his staff of 50 -- have been sifting through global concert grosses, ticket sales and tour event data since the early 1980s.

"I am not a computer guy," he said. "I was forward-looking enough to understand there was a business need to organize that concert industry data and make it available."

That database gives Bongiovanni unparalleled access to the real dollars flowing to top acts such as The Rolling Stones, Fleetwood Mac and Taylor Swift as they roam the world trying to make a living making their music.

"There is no magic to the process," he said. "You can get paid, but it's never easy."

Live events do not make the music industry wholeInvestors who study Bongiovanni's database will see that, yes, in fact the total box office for live shows did effectively quadruple from 1999, from $1.5 billion market annually, to last year, when ticket sales added up to $4.7 billion. But that jump happened as total music disc, CD and download sales collapsed from roughly $19 billion in 1999 in North America to $7 billion or so today. That means the total market for live and recorded music is actually about 40% smaller than it was back in 1999.

"The biggest single change is the rise in ticket prices," Bongiovanni said. "People think it is the greedy promoter making that money. But it's the artist trying to get paid what they think they are worth."

And making up the money lost to the digital economy is no easy move, even for the industry's top stars.